Several sources tell Reuters Nokia (NOK +0.8%) is "discussing internally" whether it should approach Alcatel-Lucent (ALU +4.6%) about a tie-up. The news service isn't clear on whether Nokia is interested in a full-blown merger. Sources caution no formal talks are currently underway.
Alcatel shares have jumped on the report. They took off earlier this month after the Nokia-Microsoft deal fueled M&A speculation. The Microsoft deal stands to leave Nokia with nearly $20B in total cash, and over $10B in net cash, to go shopping with.
Once the Microsoft deal closes, Nokia will be focused on telecom infrastructure (via NSN), mapping/location services, and IP licensing. One Reuters source states Nokia held "on again, off again" talks about buying Alcatel's mobile infrastructure business until late 2012.